Energy Storage Growth Forecast

Investing.com — Energy storage is expected to grow by 34 times by 2050, according to UBS.

The current capacity of approximately 270 gigawatts (GW) is anticipated to surge to over 9,000 GW to meet the demands of an energy mix increasingly dominated by renewables. By 2030, energy storage capacity is predicted to grow eightfold to over 2,000 GW.

The expansion of energy storage is seen as a critical component to address the intermittent nature of renewable energy sources such as solar and wind. UBS's analysis aligns with a broader consensus among various reports that foresee substantial growth in energy storage through to 2030 and beyond.

Notably, the International Energy Agency's (IEA) 2024 report indicated a significant upward revision in renewable capacity forecasts for 2050, including a 30% increase in solar capacity from the 2023 report and an elevenfold increase from the 2015 report.

> “We view this as a sign that the energy storage requirement has been underappreciated and we may see further upward revisions,” UBS analysts said in a note.

The bank also points to the changing dynamics of energy storage paired with renewable assets, estimating that storage capacity should represent about 20% of total renewable capacity. This shift is further substantiated by the UBS China Utilities team's previous forecasts, projecting an increase in the proportion of storage to renewable assets from 10% in 2020 to 20-30% by 2030.

The report explores various energy storage technologies that could contribute to this growth, evaluating their advantages, disadvantages, and commercial viability.

> “In our view, the types of storage implemented are likely to be different across regions including because of these factors,” analysts said.

While pumped hydroelectricity currently constitutes the majority of energy storage and is not expected to grow significantly due to geographical limitations, battery storage systems are predicted to experience marked growth, UBS notes. This growth is partially attributed to advancements in the electric vehicle (EV) industry and the resulting cost reductions, as well as the modular and flexible nature of battery systems.

> “Batteries have a wide range of sizes (residential to utility scale), batteries are modular, and they can be positioned wherever needed,” UBS analysts said.

However, the substantial expansion needed in energy storage comes with challenges, particularly the constraints of certain electrochemical batteries. These include reliance on critical raw materials, geopolitical risks, production issues related to water, and concerns around lifetime, safety, and the economics of storage lasting more than four hours.

Analysts suggest that “other technologies could emerge as disruptors,” such as gravitational, compressed air, compressed CO2, and liquid air storage, along with alternative battery types like sodium-ion, iron-air, solid-state, and flow batteries.